SIPP How can I avoid IHT ?

gadgetmind

But let me say again, I haven't looked at this in detail as I don't expect anything from my parents (or spouses) and if we do get anything, it's upside. I also view my SIPP as being for myself and my wife with anything left over for offspring being upside again.

jamesd

Then his best option to reduce the tax charge is to take the maximum permitted income level and regularly use some of that income to pay money to you and your brother. Regular payments out of income are exempt from inheritance tax provided they don't harm the lifestyle of the giver.

If he has any condition that could reduce his life expectancy he could consider a "scheme pension" instead of plain income drawdown. Scheme pensions use an actuary to work out the acceptable payment level and that can result in substantially higher payments for those with reduced life expectancy compared to those in good health. Costs of scheme pensions are substantially higher and it's unlikely to pay to use one unless the pot size is at least £50,000, more likely a few hundred thousand. Think in terms of £1,000 in costs a year or more.